Hoguet also likes Genting, a gaming company, with operations in Malaysia, Asia-Pacific and Europe.

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Penney's missteps helped Macy's, Chief Financial Officer Karen Hoguet said, "As you know it's obviously helped us" in 2012.

WSJ: Macy's profit beats Wall Street expectations

Hoguet said the categories that performed best during the period included handbags, watches, shoes, women's suits, luggage and furniture.

WSJ: Macy's profit beats Wall Street expectations

Hoguet sees it as a good long-term bet, though the political risk is significant in a young and fragile democracy.

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Mr. Hoguet recommends holding about 2% of an overall bond allocation in emerging-market hard-currency bonds, and about 8% in emerging-market local-currency bonds.

WSJ: The Allure of Emerging-Markets Bonds

Mr. Hoguet favors a strategic allocation to both hard- and local-currency debt.

WSJ: The Allure of Emerging-Markets Bonds

Thailand is, thanks to last September's military coup, Hoguet's most controversial choice.

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For an overall allocation to emerging markets, Mr. Hoguet recommends 13% of equities be invested in emerging markets and about 10% of total bonds.

WSJ: The Allure of Emerging-Markets Bonds

Harrison recently joined Karen Hoguet, chief financial officer, to assist her.

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Hoguet argues that there is pent-up consumer demand waiting to be unleashed, that tourism remains robust, and that the regime is talking about holding elections towards the end of the year.

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